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While current affairs seem to be stable in Montenegro, according to Tripkovic & Raicevic Founding Partner Pavle Tripkovic, the recent bankruptcies of Invest Bank of Montenegro and Atlas Bank have alarmed the local banking market.

“Such cases have not happened for a long time in Montenegro,” Tripkovic says, describing the bankruptcies of two banks (out of only 13 in the country) in a span of four months as “a big issue for the banking sector." He explains that the bankruptcies may impact the Deposit Protection Fund and make the market less attractive to foreign investors, who were, he says, affected most. In the past, he reports, the Montenegrin banking system was open and attracted plenty of foreign clients to the market, but “suddenly Montenegrin regulators became very strict and the banking practice significantly changed.” According to him, the two bankruptcies were a result of this unpredictable change, and they may well “affect trust in Montenegrin banking system.”

The strict requirements and heavy due diligence obligations currently in place, according to Tripkovic, may become barriers to foreign investment. “I understand there were risky cases, but we need some balance in the system, otherwise foreign businessmen will start avoiding banks in Montenegro due to the unpredictable conduct of the Central Bank and other authorities competent for anti-money laundering and prosecution.”

In addition, Tripkovic believes, the potential crisis in the banking system could influence Montenegro’s real estate sector. “The money that was previously kept in the banks could be rather used further for investments in real estate instead,” he says, adding, “real estate prices will probably grow in the next period.”

On the other hand, Tripkovic says, “although infrastructure is still a problem, Montenegro is improving at a slow pace.” Tripkovic points to the construction of the first motorway in Montenegro as an example, and notes that the motorway, which will be approximately 165 kilometers, will serve as a convenient transition corridor, linking the Port of Bar on Montenegro’s Adriatic coast to neighboring Serbia, which is also building its A2 Motorway. The first part of the motorway is expected to be finished by the end of this year, and two additional parts will be completed in the years to follow.

As for the legal market itself, Tripkovic says that, as the management of the country’s Bar Association has not been changed for over ten years, lawyers are struggling with what he describes as its “complete disinterest,” and he claims that the Bar is “not fighting for the interests of lawyers.” He reports with frustration that “the Bar Association is unnoticeable,” adding that “nobody knows anything about them and they have no influence on the legal market at all.”